The performance of square-mesh codends (as opposed to the conventional diamond mesh) was examined as a discard and by-catch reduction device for the Shark Bay saucer-scallop trawl fishery. Of the three different-sized square-mesh codends (50, 55, 60 mm) tested against the standard 100-mm diamond-mesh codend, the 50-mm square-mesh codend performed poorly with relatively high retention of small (<85 mm shell height) scallops, whereas the 55- and 60-mm square-mesh codends retained 22–33% less smaller scallops than did the diamond-mesh codend. Overall, a mean of 5% loss in commercial-sized scallops across all three square-mesh codends and significant by-catch reductions of up to 95% were achieved compared with the diamond mesh. Catch rate of prawns by the square-mesh codend was less than 2% of that of the standard prawn net. The performance of the 60-mm square-mesh codend presents a good basis for its use in commercial trials in the Shark Bay scallop trawl fishery. A move to square-mesh codends could result in a significant reduction of small scallops and by-catch and may potentially increase the catches of commercial-sized scallops as a result in improvements in water flow and net efficiency.